All employees at Invercargill Passenger Transport will be offered jobs if the company is sold later this month.
IPT director Kayne Baas says all 250 employees will be taken on by GoBus if the company is sold.
Amalgamated Workers Union spokesperson Calvin Fisher says workers have been told their jobs will be terminated at the end of March.
He says they are worried any new contracts offered by GoBus will be for less pay and worse conditions than the current contracts at IPT.
But a GoBus director, Craig Worth, says they'll work in good faith with any new employees and IPT says workers should be reassured by that.
GoBus is one of New Zealand's biggest bus operators, while IPT holds the public transport routes in Dunedin and Invercargill cities.